The latest crisis revolves around supporting legislation exempting ultra-Orthodox youth from serving in the military and the passage of 2019 state budget.
"I said that the nuclear agreement with Iran contains within it many dangers for the world, including the special danger of the nuclearization of the Middle East", Netanyahu said, according to a statement released on his behalf.
The haredi parties agreed to help pass the military exemption bill in its preliminary form, though they have made it clear they are expecting more. "The people of Israel do not need elections, which would go against the electoral interests of Yisrael Beytenu and the personal interests of Avigdor Liberman".
Lieberman has said that he would only support legislation that is drafted by a committee of military officials.
Should Lieberman and his party quit, Netanyahu's coalition could in theory continue with a one-seat majority in parliament.
Lieberman vowed on Tuesday that his Yisrael Beitenu party would "vote as one against the bill" as it stands now.
"Prime Minister, to topple a right-wing government over nothing would be a historic mistake similar in size to the fall of the Shamir government in 1992", she tweeted, referring to the collapse of the coalition, led by Likud's Yitzhak Shamir, and the election that resulted in victory for Labor's Yitzhak Rabin. "It all depends on Netanyahu", Naftali Bennett, leader of the nationalist Jewish Home party that holds eight seats, told Israel Radio.
Should he follow through and leave the government, Netanyahu would be left with the razor-thin 61-member coalition it had before Lieberman came on board in May 2016. Kahlon said in response that he would pull his Kulanu party out of the government if the budget isn't passed this week before the Knesset session ends. Earlier this year, the President waived sanctions to give our lawmakers and our allies time to act. "We don't want elections and we don't want the government to break up, but not at any price".
The 68-year-old premier could soon face charges in at least two separate corruption affairs, while investigations are continuing into two others.
Three of his former associates have signed state witness deals with police.
In one case, Netanyahu and his family are accused of accepting expensive gifts from wealthy supporters in exchange for financial benefits or favours.
President Donald Trump reportedly informed Israeli Prime Minister Benjamin Netanyahu that the U.S. will not be flexible with European powers in negotiating changes to the stipulations and limitations around Iran's nuclear program.
He is not legally required to step down if indicted - only if he is convicted with all appeals exhausted.